Revised Laws of Saint Lucia (2021)

9.   Duty of insurers to satisfy judgement against persons insured against third-party risks

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   (1)   If, after a certificate of insurance has been duly delivered under this Act to the person by whom a policy has been effected, judgement in respect of any such liability as is required to be covered by a policy of insurance under section 4(1)(b) (being a liability covered by the terms of the policy to which the certificate relates) is obtained against any person who is insured by the policy then, although the insurer may be entitled to avoid or cancel, or may have avoided or cancelled, the policy, he or she shall, subject to the provisions of this section, pay to the persons entitled to the benefit of the judgement any sum payable thereunder in respect of the liability, including any amount payable in respect of costs and any sum payable in respect of interest on that sum by virtue of any enactment relating to interest on judgements.

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   (2)   No sum shall be payable by an insurer under subsection (1)—

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      (a)     in respect of any judgement, unless before or within 7 days after the commencement of the proceedings in which the judgement was given (or within such other period as the court may in its absolute discretion consider equitable) the insurer had notice of the bringing of the proceedings;

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      (b)     in respect of any judgement, so long as execution thereon is stayed pending an appeal; or

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      (c)     in connection with any liability, if before the happening of the event which was the cause of the death or bodily injury or damage to property giving rise to the liability, the policy was cancelled by mutual consent or by virtue of any provision contained therein, and either—

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         (i)     before the happening of the said event, the certificate was surrendered to the insurer, or the person to whom the certificate was delivered made a statutory declaration stating that the certificate had been lost or destroyed, or

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         (ii)     after the happening of the said event, but before the expiration of a period of 14 days from the taking effect of the cancellation of the policy, the certificate was surrendered to the insurer, or the person to whom it was delivered made such a statutory declaration as aforesaid, or

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         (iii)     either before or after the happening of the said event, but within the said period of 14 days, the insurer has commenced proceedings under this Act in respect of the failure to surrender the certificate.

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   (3)   No sum shall be payable by an insurer under subsection (1), if, in an action commenced before, or within 3 months after, the commencement of the proceedings in which the judgement was given, the insurer has obtained a declaration that, apart from any provision contained in the policy, the insurer is entitled to avoid the policy on the ground that it was obtained by the non-disclosure of a material fact, or by a representation of fact which was false in some material particular, or, if the insurer has avoided the policy on that ground, that the insurer was entitled to do so apart from any provision contained in the policy.

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   (4)   An insurer who has obtained a declaration referred to in subsection (3) shall not thereby become entitled to the benefit of that subsection with respect to any judgement obtained in proceedings initiated before the commencement of that action, unless before or within 7 days after the commencement of that action the insurer has given notice thereof to the person who is the plaintiff in the said proceedings specifying the non-disclosure or false representation on which the insurer proposes to rely, and any person to whom notice of such an action is so given shall be entitled, if he or she thinks fit, to be made a party thereto.

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   (5)   If the amount which an insurer becomes liable under this section to pay in respect of a liability of a person who is insured by a policy exceeds the amount for which he or she would, apart from the provisions of this section, be liable under the policy in respect of that liability, he or she shall be entitled to recover the excess from that person.

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   (6)   In this section—

“material” means of such a nature as to influence the judgement of a prudent insurer in determining whether he or she will take the risk and, if so, at what premium and on what conditions; and

“liability covered by the terms of the policy” means a liability which is covered by the policy or which would be so covered but for the fact that the insurer is entitled to avoid or cancel, or has avoided or cancelled, the policy.